Someone pick up my jaw, I'm stunned. In a totally unexpected move Steve Jobs posted a personal letter to customers delivering a peace offering to angry iPhone users upset over yesterdays dramatic price cut. Jobs goes on to reiterate his stance that price cuts come with the territory of being an ealry adopter, but also concedes that we are the pioneers that propelled iPhone on the road to success.

In short he's rewarding our loyalty by offering a $100 coupon good towards the purchase of any new Apple product, redeemable at any Apple Store, for iPhone users not covered under a 14-day rebate, regardless of whether their iPhone was purchased at an AT&T or Apple Store. You can read Steve's open letter here. A method for claiming your coupon will be available on Apple's website next week.

That my friends is class. As the saying goes...always dance with the one that brung you, and he did. Way to go Steve.

Silly Aurans, Steve-O doesn't make mistakes. It's not like he's cutting folks a check; they have to spend it at the Apple store. Moreover, that coupon can come directly from some of the excess profit that they made on each purchaser. He's basically cemented early adopter love, ensuring that the same folks that lined up before will line up again. Anyone that was disgruntled before the coupon is essentially happier than they were before the price cut.

The money Apple will rake in from this coupon offer will more than offset that "mistake". Do the math...he gives you $100 which you then spend on merchandise priced upwards of $300. Even if I blow my coupon on a $250 iPod classic, Apple still meet costs and probably earns a reasonable profit. The dollar bill signs go even higher if customers apply those coupons on MacBooks and other luxury hardware.
I won't look this gift horse in the mouth. He threw me a $100 bone, and I am more than satisfied.

TO ALL OF YOU CRYING ABOUT THE PRICE DROP....SHUT UP ALREADY! THAT IS A CHANCE YOU TAKE WHEN YOU STAND IN LINE JUST SO YOU CAN BE A PROUD OWNER OF A NEW IPHONE THE VERY FIRST DAY. WHEN SOMETHING NEW COMES OUT THE PRICE WILL USUALLY DROP AFTER A SHORT TIME. I DONT EVEN THINK YOU SHOULD HAVE GOTTEN THE $100 REBATE.

This whole thing will probably work out in Apple's favor in the Public Relations game. Apple is a class act, and this concession to their loyal customers proves it.
I've been toying with buying a Mac Mini to use in my classroom so I can show Keynote instead of PowerPoint Presentations. This extra $100 may be what pushes me in that direction. As a public school teacher, that $200 price drop was a lot of money. Granted, I've enjoyed the look on my students' faces when they've exclaimed, "Oh, you got an iPhone? Lemme see!" This $100 rebate makes the whole price-cut situation a lot more tolerable. Thank you Apple, and thank you Mr. Jobs.

The Nano looks like a much more tempting Christmas gift for the fiancee when it's starting at $50 instead of $150. Unfortunately, I already bought all the phone accessories I want, so new hardware it is. You win my wallet, Jobs. Again.

I am not sure but is the $100 only for the 8GB version? From what I have read, it seems like it would be since the 4GB is no longer available and thus those of us who haveit can not say that they can get it for less now.
Kind of sucks since the 8 GB is now $100 less than what the 4GB was.

Steve Jobs is a complete asshat!! Are you joking me? I bought my F__king iPhone two weeks ago!! AT&T is basically telling me "too bad for you Dr. Jones!". And now I get a slap in the face by saying I'm going to have to use the credit, and potentially spend MORE money with Apple for this?? I'm not whining, I'm F__king PISSED!! Steve Jobs can **** my ***sack and pick the **** nuggets out of my **** *****!!!!!
Yea, he may have thrown people a bone, and for the truly early adopters, AKA the ones who bought the iPhone on I-Day or whatever they called it, then I would see this as a potentially fair offer. But as a person who just purchased the phone two weeks from the date they announced the price reduction, I feel my my anus has been accosted by a Macintosh!
I could give a rat's ass about a give certificate, free music, etc. I just want my $200 back and maybe then I will make the decision on whether or not to spend that money on more Apple products.

you are easily co-opted. early buyers are the core of Apple's consuming public - we are the ones who have ibooks & powerbooks at home; desktops at work; and multiple ipods; we buy the stock and Steve waves a half measure at the ones who took the risks and helped debug the device - really he owes us full $200 value and then some - read ARS Technica's reviews - there are significant firmware updates that should have been done (copy and paste anyone)
Apple has an obligation to its long-term customer base to give equal credit - it's not just a good idea, it's the right thing for Apple to do.

Lance Says:
I am not sure but is the $100 only for the 8GB version? From what I have read, it seems like it would be since the 4GB is no longer available and thus those of us who haveit can not say that they can get it for less now.
Kind of sucks since the 8 GB is now $100 less than what the 4GB was.
That is my concern as well, but according to his letter...
"Therefore, we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T"
He did NOT say "every 8GB iPhone customer"

I have to say that everyone that HAD to have the iphone the first day...its your fault you over paid. honestly you all going to bitch when prices on other things drop? when technology gets older (even by a few months) they get cheaper. Live with it, its the facts of technology life.

Early Adopters is wat made the iPhone be excepted... All us "early adopters" are what makes apple money.. And for them to shaft us like that is really low on apples part. I would expect something like that by Microsoft but not from apple.
Thats why Jobs gave us money back... He was testing waters. Now he knows not to mess....

My letter to Apple:
Read Steve Job's letter posted on http://www.apple.com/hotnews/openiphoneletter/
The last second paragraph shown below needs some clarification to avoid confusion.
"Therefore, we have decided to offer every iPhone customer who purchased an iPhone from either Apple or AT&T, and who is not receiving a rebate or any other consideration, a $100 store credit towards the purchase of any product at an Apple Retail Store or the Apple Online Store."
Here's my interpretation:
The $399(8GB) and $299(4GB)that happened few days ago wasn't a rebate correct? It was a PRICE DROP, NOT a rebate or any kind of consideration....In fact, iPhone buyer has received NO REBATE of any kind even though buyer needs to sign a 2yr new contract(EVEN FOR EXISITING ATT contracted user) with ATT anyway. I was into my 2nd year of ATT contract, so I DID confirmed with ATT and APPLE at the stores if there is any REBATE to extend contract with ATT to get the iPhone and the answer was NO, Sorry.... Albeit I bought the iPhone anyhow...it's just too nice of a phone.
Moving on...SO... WHAT REBATE or CONSIDERATION is Steve Job talking about?
Does that mean EVERYONE should be getting a $100 store credit since there wasn't any rebate nor consideration even for those who has bought their iPhone after the price drop? Such open letter is binding correct?????

Ronster, I'm thinking no.
Steve and Co. aren't giving a hundred bucks to everyone who buys a phone. Just those that weren't able to get a credit (bought within 14 days of price drop), and those who were eligible for other rebates, etc. BEFORE THE PRICE DROP.
Nice try, dude. But no dice.
Be glad you got one for 400 bucks.

Couple thoughts regarding this:
It's a great move by Steve and co. I think what we're missing here in the replies I'm seeing is something even more remarkable than the $100 coupon (which as some have already stated is excellent business for Apple). You're seeing a precedent being set; that precedent has nothing to do with Apple as a computer company.
Steve essentially has said he realizes that the average consumer of the Iphone is not the average computer guy that understands the risks of being an early adopter. By setting the precedent that the home consumer will not be completely hung out to dry as a result of sudden changes in the manufacturing markets or demand in new markets for technology, he's positioning the company to receive the trust of the home consumer market.
Phones, TV, Music.. all of these things are basic steps towards comfort and entertainment with a visible line to home automation, management and security.
You can't become what GE or Maytag is in the current American home without setting examples like this and that's what I find most remarkable in what I see here.
Then again, I could be the one crazy nut that looks for things that aren't there.
Al

Figured I'd add one more post to address those that are really hot over the $200 dollars and the perceived gaps in the announcement. I'll state three things first though:
1. I don't work for Apple, but I am someone who does consult in the Apple space and I've built more than one home office for clients using their technology.
2. I'm also a Microsoft certified engineer and have steered people away from their technology based on price point if they had equipment in their homes that could defray the costs of doing business.
3. This reply is geared towards the young and up and coming people who no doubt have been into the peer and social coolness of having an Iphone as well as the honored geeks that have to have the latest and coolest.
All that said here goes:
From Apple's viewpoint, the change in phone technologies that allowed a significant cut in price prior to the holiday season did not have to occur this far away from the holiday buying season. They could have continued to sell the devices at the existing price points and lowered prices in conjunction with the release of a new device. Ergo, they could have eaten lower sales for a month and avoided the backlash fiasco entirely.
Now the counter to this is I may be missing some key piece of information that makes this argument moot, but what I'm seeing right at the moment is corporate responsibility and maybe an effort to get rid of old stock before the holidays because a new phone may be coming out. Whatever.
Next up, to those that are hot about 200 bucks. Yes, it's a significant price drop. However, the people most likely to be hot are the people for whom that 200 bucks is a significant part of their weekly or monthly income. To that I ask one question:
Why on God's green earth, if you know you're making a salary that considers 200 dollars a heated sum, are you buying a 400-600 dollar phone with a 60 dollar a month service plan? Herein lies the real problem and it's called financial responsibility. Lack of that is not Apple's problem, it's that of the buyer. At the point where you've made that fiscally unwise decision you should be pleased you're getting anything in return.
Lastly, be aware that technology is historically volatile, and that volatility creates profits and loss. If you must have the latest shiny object, be sure that your usage of the shiny object and the amount of time it saves you on a daily basis is worth the amount you're spending. If it is at the time of purchase, you likely won't be annoyed when these things happen.
Anyway caviat emptor. If you like tech let others beta and buy the next gen. The Ipod really took off in 2004 and 2005. It came out in 2001. Only God takes 7 days to get things right the first time and even that figure receives benefit of 5000+ years of marketing spin.
Steve's human and he's being responsible. Step outside the feeling of personal entitlement and behave similarly.
Thanks.

I just purchased the iphone less than 30 days, although, more than the 14 days (Apple return policy) I purchased the 4GB, I would have rather had an option to exchange to 8GB vs. receiving a $100 gift certificate from Apple/ATT&T, especially now that the 4GB is going to be discontinued. It is interesting to note that all phones purchased at AT&T have the "right to exchange" within a 30 day period.... but NOT the Apple iPHONE (only phone that has 14 days).... doesn't appear that Apple will back their product as other companies do....
So, I'm STUCK with the 4GB iphone, as Apple discontinues this phone....

After much thinking on this topic, I am beginning to wonder if this issue may be eligible for an anti-trust lawsuit against Apple. It certainly smells of one to me! I'm certainly going to look into this issue with one of my attorney friends and see what he thinks. It might honestly be worth the time to check. If I start a class-action lawsuit, I'll be sure to let you all know!

Nothing like a frivolous lawsuit to waste your time and money. Almost as ridiculous as folks who complain about price drops. Typically, Apple drops the price on all its products within a few months after introduction - this one just happens to be in time for Christmas.

Some of you people are absolutely SOFT! A company as large as Apple doesn't get to be that large without employing intelligent business tactics, spending money on the best market research and playing the public. The price point of the 8GB phone was always intended to be 399. 599 was the value the market would tolerate for a breakthrough product along with the future sales impact of dropping the phone 200 back to the target price point. To think that this whole game was a "mistake" by apple and that they are being "considerate" of early adopters by giving you back HALF the difference makes you ignorant to business economics and what it takes to succeed in big business. Consider the profit margin of selling saps a measly 100 "Itunes" songs as "payback" for their "mistake" in overcharging you. How much does it cost apple to send the sap 100 songs? The cost of bandwidth, that small portion of equipment useage and the royalty of the song paid back to whomever. If a single song cost them a grand total of .50 I'd be amazed, but given that, that still leaves Apple with a pure profit of 50% on a "mistake" that is absolutely guaranteed since all Iphone users pwned by Jobs will most definitely spend the "store credit". So Apple's giving you back a chance to buy even more Apple crap, which has a built in profit margin of the retail value, and if you're dumb enough to BUY electrons from Apple rather than rip your own or your friend's or even download them off usenet for free then you're a happy consumer that fell face first into Apple's marketing scheme. This was a marketing scam from day one to win apple 100% of the marketing pie in the form of:
1. 1st to market this new technology
2. Pushed the pricing limit to extreme and showed investors that people were willing to pay huge $ for cutting edge tech
3 Cut pricing from that extreme to garner more customers before the Christmas rush, as stated by Steve himself
4. Made himself look "genuinely concerned" about those who propelled the device to god status for him by granting a 50% difference back further RETAIL SALES
5. Kept the early Apple promoters in his pocket while garnering millions more from his "genuine concern"
6. Proven to investors that his tactics/technology can manipulate the public into shedding thier cash
This was the plan from the start, it is still being played out, and will continue to be played out until 2008 when Apple can sit back and see just how much cash their game reaped them.
To all whiners, wake up and smell your underwear!! No one at Apple is "helping" you, "being concerned" or trying to take care of you. You spent big, Jobs is making sure you'll have to spend MORE, and you are a market test subject who seems to be falling into the predicted pattern of Apple's marketing analysts.
One last rant, this excuse of "we're working out the details of how to get the 100 credit" is nothing more than an excuse to observe blowback from the credit. In this day and age, store credits could have been easily accomplished at either store with simple accounting. This delay is yet another part of the scam to weigh the averages and get market feel for the "concern" and future Apple sales.

Yeah, pretty much what BabaJunk said.
I'm fine that I bought my phone when it was first released. I wanted it then, I bought it then, and I wouldn't have bought it if I couldn't have afforded it. I have, since I heard of the price cut thought: 1) ah well, that's just business and then 2) Hey... a credit. He had to be planning that all along. Makes him smell like a rose, makes people come in and buy more stuff.
If this was some sort of major 'goodwill' gesture, it'd be a cash rebate, not a store credit.
In any event, I'm not caring much either way. I'll take my credits like the next person and I'll buy something whenever I need it.
Bleh.

to all of you that are happy about the price cut. If u think that we got a good deal with the $100 rebate I got bad news. Apple didnt lose any money with this gift card because they are only giving u money to spend at their store. I think its a rip off because they should give u full credit back in cash. to spend it on whatever u want.

Hmm Well I was just searching on yahoo and just came across your site, in general I just only visit blogs and retrieve my needed info but this time the useful info that you posted in this post urged me to post here and appreciate your diligent work. I just bookmarked your site. Thank you again.